Residuary withholding on non-resident payments requires deduction at rates in force, with payment-time treatment for specified interest payers.

Section 393(2), Serial No. 17 imposes withholding tax on specified interest and other sums chargeable to tax, excluding salary income, when paid to a non-resident other than a company or to a foreign company. Any person making the payment must deduct tax at rates in force, without a monetary threshold. Deduction is generally required at the earlier of credit or payment. For interest payable by the Government, a Public Sector Bank, or a Public Financial Institution, deduction is required only upon actual payment. The obligation also applies to non-resident payers irrespective of their presence in India.

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